Inventory Available For RTB Grew 35% In 2013; Supply And Demand Evening Out

The growth rate of inventory made available on real-time bidding (RTB) exchanges was precipitous in 2012, and while it tapered off in 2013, it still carried some headlong speed
throughout the year.

Around the globe, publishers put 35% more inventory into the exchange-traded media marketplace in 2013. That figure is down from the 101% growth rate it saw in
2012 compared to 2011, but diminishing returns came into play and supply and demand has started to balance out.

That’s according to Arthur Muldoon, co-founder and CEO of
Accordant Media, which today released its Q4 Programmatic Pulse Report. Muldoon told RTM Daily that until the holiday period, the supply and demand was near equilibrium.

“For the holidays, we saw that inventory was pre-sold upfront — guaranteed. So that took some inventory off of exchanges,” Muldoon explained. Despite this trend, there was
still a 37% increase in available impressions in Q4 2013 compared to Q3 (6% increase in the U.S.).

In the graph below, one can see how supply (blue) dropped dramatically toward the
end of December while demand (orange) remained steady, which supports Muldoon’s theory of upfront buys occurring around the holiday season.

Muldoon called the year as a
whole “incredibly vibrant” in regards to innovation. He said the market saw lower prices, more inventory and new market players, namely agencies or even marketers directly. He called 2013
“the year of audience targeting,” and noted that “the marketplace was really opportunistic because of [the balance between] pricing and inventory.”

“There are many more buyers and participants than compared to a year ago,” Muldoon said. “There was a large influx of inventory in the past 18 months because you had
Facebook coming online with the Facebook Exchange, and you had a really large influx of mobile participants. Now it’s reaching equilibrium. We expect prices to be stable and tight going
throughout this year.”

The report also covers programmatic ad viewability, a hot topic in the market and one that could have a sizable impact on trading and pricing.
Additionally, if viewability concerns are put to rest, more brand dollars could make their way into RTB exchanges. Viewability is defined as 50% of an ad being in-view for at least one second.

Muldoon pointed out that, in general, the more money advertisers spend for impressions, the more likely the ad is to be viewable. “Advertisers willing to pay four times the cost can
gain a 20% improvement in viewability rates,” the report reads.

This might seem like common sense, but it’s not always true. For example, when the clear price of an ad
was $4-6, the chance the ad was viewable was actually slightly less than ads with a clear price of $2-4, per the report.

The report did find a clear connection between the amount of
time ads spend in-view and conversion rates. Ads that were in view for less than four seconds had below-average conversion rates. Ads that were in view for at least five seconds but less than one
minute led to conversion rates about 30% above average. Finally, ads that were in view for at least 60 seconds led to conversion rates 50% above average.

These are the kinds of stats that advertisers and developers should be taking into consideration and getting more excited about as they look to the year ahead. Especially in terms of mobile RTB, there's no putting it off any longer. I really believe its about to blow up. All signs point to that eventuality. Case in point - http://www.airpush.com/what-is-mobile-rtb-and-why-should-i-care/